Wednesday, January 28, 2009

The Case for Doing Nothing

The case for doing nothing.
Very few are making this argument (and I'm not one of them). Even Republicans think it's a good idea to pump huge amounts into the economy to get it moving (see "Foreclosure Alley" video for what might be coming north). But there's the "tough love" approach too, and it fits into Friedman's "This Is Not a Test" chapter.

Here's a sample quote:

Many of the Do-Nothings argue that a painful recession is the best way to destroy America’s runaway culture of irresponsibility and debt. Economic turmoil, after all, has a way of grounding Americans.

Dramatic belt-tightening across the board is the only way, they say, to stop the endless cycle of borrowing. “Our standard of living needs to come down to the point where it can be supported by organic output,” says Schiff.

7 comments:

John Y. said...

I can understand where the fear of our countries debt is so out of hand it will be the collapse of the country. However,we should learn from our mistakes. Mainly the great depression. Pumping money into the economy worked than through "Reconstruction" I believe that it will work again. To do nothing is economic suicide.

jonathanweedin said...

Doing nothing will only make things worse than they already are. However, we shouldn't just throw money at companies that are obviously not very responsible with money. On The Daily Show yesterday, John Stewart said that the bailouts should go to consumers to pay off debt and loans. I must say, that's a marvelous idea.

jonathanweedin said...

Oh, and here's a funny video about the government wasting money to bailout failed companies:

http://www.youtube.com/watch?v=JnX-D4kkPOQ&feature=channel_page

maryn said...

I find it interesting that stimulus packages have not worked in the past and yet they want to do it again. People are in debt here in America because they choose to live outside of their means. Now the government thinks that by doing the same thing it is going to improve our economy somehow. I am inclined to think doing nothing and letting people understand the consequences for their actions might teach a better lesson even though it would be a hard one. Why should we continue to incur big dept at the cost of generations to come?

Kirsten said...

Why shouldn't America be punished for making irrisponsible decisions? How is our economy going to improve if people keep spending more money then they make? The only way to solve the problem is to punish the people who made all those bad decisions.

publius said...

So instead of rewarding companies who made bad financial decisions and spent beyond their means, we reward people who made bad financial decisions and spent beyond their means. Am I missing something here?
-Matthew

Juan Carlos Farias102 said...

doing nothing is like another word like giving up. this is some thing that we need to get better at and not quit and expect to get help like a help less child.